Newly retired workers rack up average £6,500 debt a year

NEWLY retired workers overspend by an average of £6,500 a year before the reality of living on a pension hits them, research has found.

With the sudden time on their hands, new retirees spend more on luxury [GETTY/MODEL USED]

With time on their hands, they fill their days socialising in restaurants or at the theatre, book expensive holidays and buy new electronic gadgets.

They forget they no longer have a salary coming in and are shocked when they get into debt.

The difficulty of budgeting on a pension takes many by surprise, according to the study by insurers LV=.

Before their first year at home ends, a third of the newly retired have to resort to credit cards to pay the bills while one in 10 is forced to take out a loan.

The average pensioner spends £6,627.80 on “non essential” items in the first five years after retiring. That includes £1,280 on holidays, £1,814 on days out and £900 in restaurants.

Almost a third of those entering their sixth year of retirement said they had to start budgeting to avoid running out of cash. More than a third fear their savings will run out and a fifth regret their earlier spendthrift ways.